Watching Paddy Murray solving problems on his new butt reducing and log sorting line – clearing the piece of bark that by obscuring the photocell’s ‘vision’ is bringing the line to a halt and momentarily foxing the computer operatives in the cabin – would convince even the most casual of visitors that this is a managing director who believes in the hands-on approach.
It also leaves one with the strong impression that nothing much gets past the chairman and MD of Murray Timber Products.
He does, however, have a different view on the world to most Irish sawmillers. He remains completely unmoved by all those uplifting tales of the Celtic tiger, for example. The Irish economy may be booming, but in Paddy Murray’s opinion, it’s nothing to get too excited about. He likes to keep it all in perspective.
‘The last two years have been very good for construction,’ he concedes, ‘but then we’ve been very good to the market and given them everything they want. We work very hard to supply what the customer wants because we have to make the market dependent on us.’
Two mills
Murray Timber Products processes construction timber in 2.4-6.6m lengths, pallets and fencing and does so from two sites, one in Ballon, County Carlow, the other in Ballygar, County Galway. Group production is 17,000m³ per month on one shift, but Ballygar’s production will be boosted by the new butt reducing and log grading line which is being commissioned. Custom built at a cost of I£1m, it is hoped the line, which runs at 100m/min, will increase yield by 2-3% and increase mill production by 10%.
Logs at Ballygar are graded into batches for pattern sawing – ie there is one sawing pattern for a batch rather than for individual logs. At Ballon, however, a scanning system which optimises log yield is in operation. The next phase of development at Ballygar will be the installation of a drop sorter.
All structural timber is kiln dried to 18% mc on site – Ballygar, for example, has four kiln chambers each with a capacity of 120m³ and Ballon has eight with similar capacity.
The stock of roundwood across the two sites (20 acres at Ballygar and 14 acres at Ballon) at any one time is about 15,000m³, while the sawn timber tally stands at 10,000-12,000m³.
The company cuts mixed species, though 95% of it is spruce, and sources most of its raw material from Coillte and the Northern Ireland Forest Service. Both sites are well located for log supplies with average hauls of 60km at Ballygar and 35km at Ballon.
Another reason for Paddy Murray’s reputation as a bit of a maverick in Irish sawmilling terms is that he has a fairly jaundiced view of the export market – a view supported by his financial controller Tony Hanlon. Despite widespread opinion that the Irish housing market will be down by around 10% this year, Messrs Murray and Hanlon are confident that the home market will continue to sustain the business – and they’ve got the figures to prove it.
‘We’ve increased our sales and our customer base by 20% this year alone,’ says Mr Murray, adding that his marketing strategy is based on the close personal contact his salesmen have with customers. Linking into customers’ stockholding is an initiative he’s keen to develop.
Competition to imports
‘We’ve displaced imports, not domestic competition,’ continues Mr Murray. ‘We’ve had to compete with reduced Scandinavian prices but we’ve limited the fall in our prices.’
Some product is exported to the UK, but more to keep the door open than to establish any export culture. ‘It’s non-profitable,’ says Mr Murray. ‘It just helps us off-load products that are over-supplied in Ireland – wingboards [sideboards] for example, which account for 20% of Ballygar production.’ His business philosophy, he says, is to compete by driving costs down, not by seeking overseas markets.
He concedes that exports of pallets and fencing are on the cards because the Irish market has reached saturation point, but stands firm on not shipping structural timber across the water.
‘We don’t feel exports in construction material are necessary,’ adds Mr Hanlon. ‘Although volumes of timber will be increasing over the next few years, we don’t believe the volumes of construction grade timber coming on stream will be sufficient to warrant it.’
‘We have a determination to displace imports of standard timber, not imports of planed timber for value-added products such as flooring,’ affirms Mr Murray. ‘I don’t believe we can do that because of the quality issue.’
He believes Irish timber is not of sufficient quality for value-added products, but is totally unfazed by what some would see as a lack of opportunity. ‘What is value-added?’ he asks. ‘It’s just another commodity. Flooring started well, for example, but now people are just trading in it as a commodity.’
He does see opportunities for the com-pany in timber frame but believes in exercising caution and is certainly not going to rush in unprepared. ‘We’ll do it when we can do it right,’ he says. ‘We’ll start at the Carlow plant and put a new line in there, but we don’t want to get into it before we’re ready and run the risk of letting people down.’
Murray Timber Products is also keeping a watching brief on the looming residues mountain which will be created when the forecast increase in material extracted from Ireland’s forests becomes fact. Not only will the increase in volume be a logistical challenge, it will also force residue prices down.
The company has a contract to supply Masonite with 40,000 tons of chips a year. It also supplies Finsa and Willamette. Paddy Murray admits that, if he couldn’t shift his residues, within a week his mills would grind to a halt.
But, again, the company is reluctant to consider exporting, questioning whether there is, in fact, an economical overseas market for residues.
The company is also relatively unconcerned at the prospect of a fall in prices. ‘Who’s to benefit by us getting residues off the island?’ asks Mr Hanlon. ‘Why should we not work to make the residue users on the island as competitive as possible so that they can maximise usage?’
Residue solution
The company is hoping that, with this approach, expansion by Willamette, Masonite and Finsa will resolve the problem, along with the increased use of residues as fuel in the mills’ kiln furnaces.
Failing that, a new player in the Irish forest products team – such as a combined heat and power plant – would be welcomed by the company as part of a policy of clean energy to reduce environmental pollution.
Mr Hanlon is a great believer in allowing demand to resolve price levels.
‘Ultimately, the market for the end product sets the price for the grower.’
‘Grant aid and subsidies don’t work,’ says Mr Murray firmly. ‘We need a level playing field.’
